Anyone even slightly aware of cryptocurrency has heard of the myriad ways it could make them wealthy overnight. While it certainly can (try trading), it is certainly not the only exciting way this bit of technology is useful to society. For those able to see beyond their wallets, here are eight interesting uses of cryptocurrency:
Reward System
Several organizations have realized the potential usefulness of cryptocurrency as a means of rewarding customers and administrators. This reward can be based on services rendered, loyalty, user engagement, or any number of other bases. A reward system drives up user activity and creates a mutually beneficial environment for both parties. In some cases, companies will use traditional cryptocurrencies such as bitcoins or ether, but they may also choose to create their own. This can be seen in the cases of Steemit and SolidOpinion , two organizations who have built social media where there is a reward in the form of tokens for likes and contributing to the platform.
Private Transactions
This entry, while indicative of an important and inflexible aspect of cryptocurrency, to some extent exemplifies a major criticism levelled at cryptocurrency. The lack of a centralized entity to regulate and control the use of cryptocurrency leaves each transaction the responsibility those involved. Transactions using cryptocurrency maintains the privacy of the individuals involved by giving them a pseudonymous identity when transacting on the blockchain. Thus individuals and organizations have an increased sense of privacy when conducting transactions online.
Transparency
Each new block on a Blockchain creates a new, immutable record of the transactions of its user. It is a ledger with the complete financial history of each user, and this is one of its greater advantages. One such way is that it gives individuals a simple but immutable means of disclosing their financial history. Each transaction made using cryptocurrency requires the consent of all parties involved and only takes place once it’s given. It is then included in the ledger. Any challenge placed to either party can be easily settled by disclosing this ledger. Think about it this way, any transaction linked to your public key from the inception of that key can be traced on the blockchain. A chocolate factory for auditors and forensics of the future.
Global Currency
The possibility of cryptocurrency becoming a global currency is not as far off or unlikely as most would believe. The reasons for this should be obvious to anyone with a working knowledge of the concept of legal tenders and the potential of cryptocurrency in an increasingly digital world. Every day fewer people make use of cash and more people are introduced to digital transactions. The world has long since been connected by the internet, while the aeroplane means no one has to spend two consecutive days in any one country. In a world, this open, a leading barrier to intercountry transactions is the difference in currency. Every such transaction will require a currency conversion that in most cases will mean a relative loss for each party involved. This is entirely solved by cryptocurrency. If implemented on a global scale, a person could wake up in Egypt, fly to France, walk into a store and purchase a bag of chips without converting money. This impact is profound and could be one of the most dramatic shakeups in world finance in centuries. Thank you, Satoshi
Money Transfers
This has long ceased to be a major problem for most of the advanced nations. The introduction of internet banking to the public meant money transfers could be done in seconds, years before bitcoins were created. But like many technological improvements, cryptocurrency improved, possibly even perfected, this solution. Its decentralized nature means users can bypass a major hitch in money transfers which exists in every transaction; service charges. Cryptocurrencies also involve charges for transactions but, depending on the trading platform , this charge will mostly be minimized and constant. This means transfers involving literally millions of dollars will cost the same as those involving hundreds.
Startup fundraising
There has always been a bit of a barrier set up against regular individuals aiming to invest in startups. This has more often been within the jurisdiction of venture capitalists who act largely as gatekeepers to both the startups and prospective individuals. In a lot of ways, this has hurt both investors and startups in the past. With cryptocurrency, this is no longer the case. Initial coin offerings (ICOs) are cases whereby a startup company creates its own cryptocurrency which prospective investors will trade for using their more established cryptocurrency (Bitcoin, Ripple). The success or failure of this company will then be reflected in the value of the startup’s cryptocurrency i.e. if the company succeeds its cryptocurrency will gain value if it fails the value of its cryptocurrency will drop.
In-app and In-game Transactions
Applications began giving users the ability to make purchases right in the application within the lifetime of the first mainstream cryptocurrency, bitcoins. These in-app purchases would access the user’s bank accounts, usually via the credit or debit card details supplied by them. Users could purchase applications, extra features of applications, or real life items related to said application. With time this feature extended to video games as well. These purchases mostly involved an exchange of some sort, users would be purchasing a currency specific to that application. The problem was that this was a one-way exchange, so users could never recover their money or use it outside the application or game. The use of cryptocurrency, as used by several apps and games already , neatly avoids this issue. Users are now able to not only easily transfer and convert their in-app cryptocurrency, but they are also now given an avenue to make even more via their participation in said app.
This article is partnership with Nairametrics and also appeared here
